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April 17, 2019

Techwave

How Is Blockchain Helping the Traditional MDM?

The tech
sector is still vigorous in discussions around blockchain. Everyone is still
quite excited about the potential of this relatively young technology. While
some aspirations are possibly too ambitious, there are some applications that
have more than a little potential. In some practices, blockchain feels like the
only viable direction to move. Master data management (MDM) is possibly on the
top of that list.

The
Myth of the Monolith

It’s easy to
think of a business or organization as this single, well-oiled machine. It’s a myth.
MDM exists as a concept exactly because large organizations are not perfectly
centralized monoliths. Data is typically collected at local nodes, and
combining and organizing the data from every node is a major challenge. If the
source of master data comes from a decentralized system, it seems logical (and
perhaps inevitable) that the best treatment is to utilize a decentralized
management system.

That’s the
core value of building MDM on blockchain. Each local data-collection node
becomes a master ledger and contributes to the integrity and security of the
master data. It makes the process of reconciling, protecting and using data
less expensive and more efficient.

Making
Data Better

It’s easy to
generalize how decentralization is key, but specific examples and benefits go a
long way. Let’s start with reconciliation. Blockchain algorithms are primed for
data reconciliation. It’s already necessary to update the master ledger. This
eliminates the traditional movement between units.

Blockchain
can also lower costs. The decentralized network doesn’t need the same level of
high-end server management. Without a central server or network to maintain,
costs drop.

Blockchain
data is also more reliable. The verification process inherent to blockchain
practices ensures that data is robust. Additionally, the decentralized nature
of the network makes it far more difficult to gain large amounts of data from a
single malicious attack.

Perhaps most
important of all, blockchain adds transparency to data management. The audit
trail is incredibly difficult to corrupt, and it is widely accessible. It makes
all transactions more transparent and eliminates many potential disputes.

Building MDM
on a blockchain is not necessarily an easy enterprise. It will require
significant investments — especially in time and effort. The long-term benefits
are clear and inescapable. If the goal is to make MDM easier, more efficient,
more reliable and more affordable, this is a transition that will likely take
place for most organizations. The only question from here is how long will you
wait?

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